Lease to Own - How it Works
The LeaseToOwn247.com lease purchase offers home ownership opportunities to people and families that cannot currently qualify for a home loan, but are prepared to work on a pre-determined game plan to convert to permanent financing. We believe that before the lease term expires, we can help you successfully qualify for financing to help you purchase a home.
During the 1 to 36 month lease term, you will have the opportunity to rebuild your credit, complete job history requirements, document income, file tax returns, and accumulate savings, all while living in the house you selected.
If you share a common interest in finding a home now and have the ability to follow the process for permanent financing, you can take advantage of today’s home prices while participating in the future equity.
You Pick the House, We Buy it For You!
After you select the home you want to buy and we get you approved for leasing, our Investor will purchase the home for you. The "Total Cost Basis" is the total price that our Investor pays for your home, plus additional fees such as closing costs, renovations and initial repairs. The "Total Cost Basis" is the number we use to determine the resident's "Right to Purchase Option Fee". Below is an example of the "Total Cost Basis" for a $200,000 home.
Total Cost Basis (Investors out of pocket expense)
1 Includes costs such as transfer taxes, attorneys’ fees, title insurance, etc.
Total Money Required To Get Started
The total money required to move into your new home is a combination of the First Month's Payment, Refundable Security Deposit and the "Right to Purchase Option Fee".
1. Lease Terms
The minimum lease required is 12 months and shall not exceed 36 months (3 years). Your monthly lease payment is guaranteed not to increase unless property taxes or Home Owner's Association fees are increased.
Example: On a $215,000 home, the First Month's Payment and an equal Refundable Security Deposit would be required for a total of $4,300 to execute the lease.
2. Monthly Payment
In most cases the monthly lease payment of the property will be approximately 1% of the "Total Cost Basis".
Example: The monthly lease payment for a $215,000 home would be approximately $1,935 per month.
3. Right to Purchase Option Fee
The Right to Purchase Option Fee is a separate fee that allows you the option to convert the lease to permanent financing any time after the first 12 months. The amount of the "Right to Purchase Option Fee" will be between 5% to 20% of the initial purchase price. This upfront fee can be applied towards your down payment upon conversion to permanent financing at the end of your lease.
Example: $215,000 (Total Cost Basis) would require a minimum of $10,750 (Right to Purchase Option Fee) to secure the purchase option.
Summary of Expenses to Lease Home
Below is a summary of the initial expenses required to lease-to-own your home.
Total Cost Basis (Paid by Investor)
First Month's Payment (0.9% of initial purchase price)
Refundable Security Deposit (equivalent to 2-month payment)
Total Money Required To Get Started
Note: There are additional costs that the resident will incur if they exercise the Right to Purchase Option such as Closing Costs to purchase the home including Transfer Taxes, Attorneys’ Fees, Title Insurance, etc. Therefore, the actual costs for the resident to exercise their Right to Purchase Option and convert to permanent financing will vary.
How We Split the Equity
During the first year of your
Example: $215,000 Total Cost Basis (paid for by Investor)
Year One: If the property value appreciated at a rate of 5% and was appraised
Year Two: If the property value appreciated at a rate of 10% and was appraised for $237,575, the equity would be split between you and the Investor. (Your equity $10,750 and The Investors equity $10,750)
Year Three: If the property value appreciated at a rate of 15% and was appraised for $247,250, the equity would be split between you and the Investor. (Your equity $16,125 and The Investors equity $16,125)
Exercising Your Right to Purchase Option
At anytime after the first 12 months you have the opportunity to exercise your Right to Purchase Option. Here are your 3 options for moving forward:
Option 1: The Investor will sell you the home allowing you to split any remaining equity after the first 5% once you convert to permanent financing by using the game plan that we provided to you. (Right to Purchase Option Fee
Option 2: The Investor and you can sell the property and split the balance of the remaining equity after the first 5%. (Right to Purchase Option Fee and Refundable Security Deposit would be added to your equity proceeds.)
Option 3: Notify the Investor you have decided to walk away and forfeit your Right to Purchase Option. (Right to Purchase Option Fee would be forfeited to the Investor and your Refundable Security Deposit would be returned to you after a clean inspection was approved.)
Ready to Get Started?
LeaseToOwn247.com has streamlined the path to home ownership for those that desire to live in a home, but are not able to qualify for a mortgage. Stop throwing your money away on rent and capture the American Dream of Home Ownership today!